* U.S. bank plan cheered by investors
(Adds details, comments and official numbers)

By Frank Pingue

TORONTO, March 23 (Reuters) - Toronto's main stock index
surged more than 5 percent on Monday to its highest close in
six weeks as a massive takeover of Petro-Canada PCA.TO and a
U.S. plan to rid banks of toxic assets helped boost sentiment.

Energy shares raced higher as the price of oil, a key
Canadian commodity, hit a three-month high, while Suncor Energy
Inc SU.TO agreed to buy rival Petro-Canada for about C$18.43
billion. [ID:nN22497404]

Another key factor behind the index's gain was a U.S. plan
to buy up to $1 trillion in toxic assets, a move that will be
critical to hopes for a U.S. economic recovery. [ID:nSP429491]

"This is the most credible plan I've seen from the U.S.
Treasury to date and it looks like the private sector and the
stock market is buying into it," said Ian Nakamoto, director of
research at MacDougall, MacDougall & MacTier. "For me, this is
some validation that there is some meat on the bones here."
Continued...